The simplest way for a monopoly to arise is for a single firm to
a. decrease its price below its competitors' prices.
b. decrease production to increase demand for its product.
c. make pricing decisions jointly with other firms.
d. own a key resource.
d
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A policymaker in favor of stabilizing the economy would be likely to believe
a. recessions are a waste of resources. b. economies must suffer through the booms and busts of the business cycle. c. the long policy lags make implementing policy changes in response to recession too risky. d. policy increases the magnitude of economic fluctuations.
National debt is likely to fall when
A. there is a succession of budget deficits. B. government’s expenditure falls short of its receipts. C. government’s expenditures exceed its receipts. D. government expenditure equals revenue.
During a period of unanticipated inflation,
A. Debtors and creditors are both better off because of lower real interest rates. B. Individuals on fixed incomes are better off. C. All individuals are worse off because of the level of uncertainty. D. Debtors are better off and creditors are worse off.
Tracy won a $100 million jackpot. She can receive the jackpot as a $5 million payment each year for 20 years, or she can ask to receive the present value of all those payments all at once now. Assume an annual interest rate of 5 percent. If she decides to take the present value payment, about how much will she receive?
A. $52.1 million B. $62.3 million C. $71.4 million D. $78.6 million